Cash Flow Challenges in the Credit Freeze? New Receivables Financing Solution Offers the Liquidity You Need
As the economy continues to slow and traditional sources of credit tighten or dry up altogether, many suppliers are struggling to get the funds they need to maintain adequate cash flow. Even if your business still has access to cash resources, increasingly restrictive lending terms and a sharp drop in cash availability can negatively impact your day-to-day operations.Ariba Receivables Financing is an innovative new supplier-focused solution designed to help you overcome these challenges and effectively weather the current financial crisis. Delivered through Ariba ecosystem partner The Receivables Exchange, Ariba Receivables Financing gives you an easy-to-use, inexpensive way to get the cash you need. Moreover, you can directly control cash flow through Ariba Receivables Financing for your business—rather than having to depend on customer invitations to obtain early payments through third-party lenders.
What Is Ariba Receivables Financing and How Does It Work?
Ariba Receivables Financing is specifically designed to give suppliers immediate access to funds tied up in receivables, making it easier to manage operational cash flow more effectively. The Receivables Exchange provides the world’s first online marketplace through which you as an Ariba supplier can offer receivables for competitive auction. Interested capital providers then respond with bids, and you choose the ones you wish to accept. The bidding process helps drive down rates, enabling you to keep financing costs low.
You can begin using the introductory version of Ariba Receivables Financing right away. Simply go to www.receivablesxchange.com/ariba_workingcapital.html, then follow the registration instructions.
How Can Ariba Receivables Financing Benefit My Business?
By giving you a reliable and cost-effective cash flow resource, Ariba Receivables Financing ensures that you have steady access to short-term funds so you can keep your business running in good economic times and bad. It also helps you better manage risk by adding to your existing pool of liquidity options. Regardless of your company’s strength or credit history, one misstep in today’s financial environment can cause traditional lenders to yank your credit line or significantly hike interest rates and fees—making the need for alternate financing options imperative. Ariba Receivables Financing is a smart choice to ensure that you have the cash you need when you need it.
In addition, Ariba Receivables Financing lets you leverage the strength of your trading history on the Ariba® Supplier Network™ to earn a more favorable risk assessment, helping you receive better lending rates from capital providers.
How Does Ariba Receivables Financing Compare to Other Financing Options?
Ariba Receivables Financing offers two key advantages over other credit resources: it’s less expensive than many, and it doesn’t require a bank or buying organization to let you use it.
Traditional solutions such as Pcards, factoring, and asset-based lending can be costly, with fees and interest ranging from 24 to as high as 48 percent APR. These resources may also be difficult to access during a credit crunch, when many banks significantly curtail their lending. Selling receivables through third-party arrangements offers more favorable rates, but you must be invited to participate by a customer. Working capital management solutions such as dynamic discounting for early payment are another good choice, yet some customers are unwilling to use these options in a down economy.
“It’s imperative—especially in this economic environment—that we find faster, more competitive ways to improve our cash flow. The ability to trade our receivables on the Exchange is going to answer our needs for a faster way to realize even greater growth.”
George Rosero, Founder and CEO, Atlanta Pediatric Therapy
With Ariba Receivables Financing, you can sidestep all these limitations. Instead of relying on lending institutions or customers to open the gate, you can handle the entire process yourself over a convenient online platform.
Ariba Receivables Financing also provides greater visibility into your cash flow by enabling you to manage everything through one location—the Ariba Supplier Network.
How Do I Get Started?
You can begin using the introductory version of Ariba Receivables Financing right away. Simply go to www.receivablesxchange.com/ariba_workingcapital.html, then follow the registration instructions. Ariba Receivables Financing will perform a risk assessment on your business and notify you by email of your approval.
Next, select the invoices you wish to finance from your Ariba Supplier Network inbox, then create and export a CSV file of those invoices and upload it to the TRE website. (Note that you can create and upload CSV files of non-Ariba invoices as well.) There you can define parameters for each invoice, such as minimum and maximum payment rates, payment timeframes, specific amounts you require, and more. You can set up automatic acceptance of financing bids that meet your criteria or handle responses manually—giving you complete control over the financing terms you accept from capital providers.
Where Can I Learn More?
To obtain detailed information about Ariba Receivables Financing and the Ariba partnership with The Receivables Exchange, go www.receivablesxchange.com/ariba_workingcapital.html.
